Monday, March 19, 2007

New York Times Investigation of Shrine


A major investigation into financial improprieties within the Shrine was splashed across the New York Times this morning.

Major points:
• Only 2 percent of the Shrine hospitals’ operating income comes from money raised by Shrine temples and members’ dues. (The bulk is supplied by the hospitals’ $9 billion endowment.)

• A top Shrine official told a meeting of temple treasurers that poor accounting for cash coming into the organization was “an increasingly common problem,” and that more than 30 temples had discovered fraud — like theft of money and inventory, altered bank statements, padded payrolls and fake invoices — amounting to as much as $300,000 and involving members of their “divans,” the five-member boards that govern each temple.

• In Texas alone, at least four of the state’s 13 temples have lost money to theft, embezzlement and faulty accounting over the last five years, according to several Shriners there.

• In one of the rare cases where the Shrine prosecuted wrongdoing, the Zem Zem temple in Erie, Pa., accused a former top official last year of misappropriating $1.2 million in bingo revenues. The temple settled for an undisclosed amount.

“The leaders of this organization think it is better to persecute the innocent than to prosecute the guilty,” said Clairence Ballard, a member of Cahaba Shriners in Huntsville, Ala., who found that charitable money raised through bingo was being used to cover fraternal, and perhaps personal, expenses and faced an internal inquiry.

[Richard A. Baumback] became potentate in 2003 and immediately received a personal reminder of flaws in the temple’s financial controls: The $10,000 he had raised the year before to offset expenses he expected as potentate was gone, tapped by his predecessor to cover temple deficits. “He told me that was the way the system worked,” Mr. Baumbach said.

3 comments:

Nathan said...

I do very nicely without a Shrine membership. I've never regretted not joining the organization and I certainly don't regret it now.

It needs to be separated from Masonry, and that soon.

Chris Hodapp said...

I know that at Murat Shrine in Indianapolis, events that are fundraisers, such as the Circus, are labeled (albeit discretely) as to whether they are benefitting Murat or the hospitals.

With more than 3,000 clubs, centers and units, I truly believe the problems are comparatively small, and stem from two major problems. The first is that part-time, non-professional, volunteer treasurers and organizers are not equipped to run a $9 billion corporation that take in thousands in undocumented cash each year.

The second is that Noble Zeke and Noble Cletus have been running the bingo games this way since WWII. What started as a habit in 1947 became custom by 1955 and unwritten policy by 1968. They hand the Potentate an envelope of cash because "that's the way we've always done it." Times have changed but, as this fraternity is so slow to figure out, we haven't. Unfortunately, the law and government agencies of the land no longer look the other way on this stuff.

As for backstabbing and retribution against whistle blowers, so what else is new? This is peculiar to the Shrine? Or to Freemasonry?

I do think the time has come for the Shrine to go its own way and finally remove the connection to Freemasonry. The direction of Freemasonry is slowly steering towards more concentration on improving the experience for lodge members, with a new interest in family and social events, and looser attitudes towards the alcohol question. The Shrine, on the other hand, has this massive charity to support, and the Masonic connection may be limiting their own growth. Tampa has encouraged one day classes, and its no secret that their hope is to interest more new men themselves because of such classes. Removing the Masonic tie would certainly open the doors to greater potential numbers for them. If it is truly "all about the kids," maybe they would be better served with a broader base of new recruits.

Chris Hodapp said...

In reading several Masonic forums this week, I did see one simple response to the NY Times article, penned by Brother Jim Rocha on the Philalethes Society forum.

To paraphrase and enlarge on Brother Jim's post: 135 years, 191 chapters, 400,000+ members, 4 countries, 22 hospitals, donations of $721,000,000 per year, serving 800,000 children.

Are there problems? Sure. A litany of them worthy of a NY Times investigation? Hardly.